The argument that patents are necessary to support long-term R&D
is circular: long-term R&D only exists because the patent system
makes it more profitable to invest in long-term research in the
hope of discovering something novel and patentable than to invest
in the gradual, step-wise refinement of existing technologies
that was the rule before patents. Creating an exclusive property
right in "novelty" does precisely what any other similar subsidy
does: it artificially raises the value of novelty at the expense
of other things such as craftsmanship and service.

That may or may not be a good thing; novelty may be something we
think is good to subsidize as part of our culture, much the way
the French subsidize wine production. Or we may think that such
novelty is so valuable that we want more than the natural amount
of it. Even Dr. Friedman agrees that patents encourage the
production of novelty; but the question naturally raised by that
is this: we, as libertarians, don't ask what the "right" amount
of bread or cars produced is; we assume it is whatever the market
naturally produces. Why, then, do we attempt to produce the
"right" amount of novelty by encouraging it with patents, rather
than letting the free market decide that as well?